Tuesday, October 30, 2012

Copies, imitations or clear differenciation: brand dilemma in China

New brands and products in China must choose between copies, imitations and clear product differenciation: a strategical dilemna!


Less copies in China
Back in 2006 and 2007 in Changsha there were many copies of Chinese and foreign brands.
Today you see less copies in China at least this is my perception from daily observations. n'ai Unfortunately, there is no study to confirm this.



More imitations in China
However, I notice that imitations are always visible in China. I believe that you have more imitations as compared to a few years ago.
Imitations are copies of a well established product aiming to confuse customers. Chinese consummers lack brand education and can be easily confused. They hardly distinguish between a famous brand and a mere imitation.



Legal aspect: copies and imitations
From a legal aspect, I think that imitations are tolerated (and it might be difficult to proove the imitation). On the contrary, copies are more often sanctionned. 
This would explain that you have less copies but more imitations?

Imitations a few examples:
Left the famous brand, right the imitation


For batteries it is risky to choose different colors than yellow and red.
Still the products likeness is appealing.

The famous brand: energizer


The Chinese brand.
You notice the dispositions of colors almost similar: alterning black and red. For customers it is difficult to judge the product quality except from the packaging and brand awareness. And batteries price can vary a lot from one brand to the next!



This last brand chooses to differenciate itself using a different packaging.



All Chips packagings in China have their mascot (a famous singer, sportman...). Don't ask me why?
Only the packaging color, logo, the mascot changes (and also the shape, specific tube shape for Lays' chips).






Necessity to follow customers expectations on products packaging
Obviously packaging should look similar to allow consumers to well identify the product. It is difficult for a new brand not to get "inspiration" from existing and well established brands.
It is therefore difficult for a brand to differenciate itself without imitating the leader.
This is even harder in China as Chinese consumer market until recently is very homogeneous.

For example:
Tube shape packaging for chips are known by consummers as Lay's chips. For a new chips brand, choosing packaging that is not a tube shape will have immediate consequence: consummer perception of a cheaper product, for lower income customers... And maybe products not clearly identify as chips at first sight.
Chinese consummer seldom read anything that is written on the packaging...
Another example if you take custards cookies, a new brand can choose between grey or brown. For milk you can choose between white and green...



Resume:

  • If a new product steps out of consumers perception, it can be ignore by Chinese customers
  • If a new product is an obvious copie, it could be sanctionned
  • If a new product is an obvious copie, it can not create its own identity. It can only hope to steal the identity of the famous brand if this brand is still not strong enough!
  • When a new product develops a different brand identity, it shouldn't forget customers product perception

As you understand from this post companies marketing teams in China must navigate between copies, imitations and real brand identity. This strategical decision is crucial for companies.

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